About this Show

Fareed Zakaria GPS

News/Business. Foreign affairs and policies shaping the world.

NETWORK
CNN

DURATION
01:00:00

RATING

SCANNED IN
San Francisco, CA, USA

SOURCE
Comcast Cable

TUNER
Virtual Ch. 759 (CNN HD)

VIDEO CODEC
mpeg2video

AUDIO CODEC
ac3

PIXEL WIDTH
1920

PIXEL HEIGHT
1080

TOPIC FREQUENCY

China 11, Egypt 10, America 7, Israel 6, Us 5, United States 5, U.s. 5, Sharia 4, Europe 4, Malibu 4, Morsi 3, Liz 3, United Nations 3, London 3, Lebanon 3, Beijing 3, Gordon 2, U.n. 2, Volkswagen 2, Africa 2,
Borrow a DVD
of this show
  CNN    Fareed Zakaria GPS    News/Business. Foreign affairs  
   and policies shaping the world.  

    December 2, 2012
    10:00 - 11:00am PST  

10:00am
i want to continue to promote what i offer. >> in the end louisiana's unusual race turns out to be rather conventional, very expensive and nasty. hopefully this time next sunday we can put a period on election 2012. thanks for watching "state of the union." if you missed us, search itunes for state of the union. this is "gps." welcome to all of you in the united states and around the world. i am fareed zakaria i can't. we'll take you around the world today starting with egypt. the nation has erupted. we'll explain what the power struggle between the president and the courts means for the rest of the arab world and the world at large. then china's new leaders. we know their names but who are they and what can we expect from them.
10:01am
is this china's gorbachev or will he take a hard line? finally, the black swan, a best seller some say prediktsd the economic crisis. its author on his fascinating new book. and the next phase of europe's crisis. which nations might find themselves split apart. i'll explain. first, here is my take. arafat's body has been exhumed for investigation. bringing back memories of the unpredictable palestinian leader. the news broke at a time when a conventional wisdom has begun to take hold that the middle east today is much more dangerous, unstable, violent and anti-american than before. let's take a look at facts. in the 1980s the newly empowered radical islamic republic of iran unsettled the region with its promise to spread its revolution elsewhere. lebanon was in the midst of a
10:02am
bloody civil war. that engulfed itself and the palestinians and israel. iran and iraq fought a gruesome war with over one million casualties. hezbollah attacked u.s. armed forces directly forcing a humiliating withdrawal from lebanon. a cia station chief was tortured and killed, and u.s. secrets and interests compromised, and that was just in one decade. or consider those days from israel's point of view. during the 1980s, jerusalem faced well arms regimes. leading members of the rejectionist camp that launched permanent hostilities. no arab regime would speak openly about peace with israel. the official charter of the palestinian liberation organization called for replacement with a palestinian state. his chief tactic was terrorism. against israelis, europeans and americans. today the soviet union has collapsed, hussein is gone.
10:03am
syrian regime is teetering. israel has grown to become a regional military super power. it's defense budget is larger now than that of all its neighbors put together. its technological advantages put it in another league. the palestinian authority affirms israel's existence and works with it regularly. iran remains a threat. it is isolated, contained by few other countries in history. there's discontempt at home, and faces the combined opposition of the secular arab states. amidst the disorder, a broader contest for regional power. israel has the most powerful economy and military, but lacks political power for obvious reasons. turkey has economic and military power, but it also has growing regional clout. egypt is the natural leader of the arab world but it's not in a position to dominate.
10:04am
its economy is shambles, its military is second rate. the public opposition has been reassuring. the middle east is a complex region that is changing fast. grand generalizations about it are likely to be undone by events. but it is a more vibrant, energetic, open, even democratic place than the middle east a generation ago. for more, read my column in this week's "time" magazine. let's get started. it was a week filled with tension and violence in egypt. there were mass protests after morsi issued a decree neutering the judiciary. there were demonstrations in his favor, and a constitution was drafted that spurred protest on the street. what to make of it all? two of my favorite scholars are
10:05am
with me. welcome, guys. conventional wisdom is this is a power grab by morsi. is that accurate? >> his dclaration gave himself extraordinary powers. every decision he makes is now free of any possibility of judicial review. but really, the game is kind of moved beyond that now. what is motivating people to protest in egypt is not that constitutional declaration alone, it is now the new constitution that morsi's allies in the constituent assembly rushed through. >> steve, what is the army's role in all of this. that's the piece people don't understand. you have morsi, muslim brotherhood and others behind this constitution. liberals, secularists opposing it. where does the army stand? >> the military has essentially removed itself from the
10:06am
political system. the new military leadership that came into power in mid-august as a result of morsi's declarations have a deal with him. they were relieved of the burden of having to govern egypt. removing themselves from the political system is more in keeping with the history of the egypt armed forces since the 1967 defeat when they determined being a political army was not good for their organization and their ability to fight a war on the battlefield. >> when you look at the struggle, is it first of all essentially the islamist versus the secularist, and is it fair to say as everybody does the islamists have greater appeal, they're better organized, they're going to win this? >> i think it is, right now there are basically three groups here that are contending for the loyalties of the great undifferentiated mass of egyptian people. one group is the egyptians.
10:07am
the people you remember from tahrir square a couple years ago. the third group, the mubarak loyalists. during the revolution of 2011, it was the islamists and young revolution nar ees against the loyalists. now because they have been so heavy handed in the way they have governed the transitions it's now really the revolutionaries fighting them. it takes egypt significant step more toward islamic policy. just a really quick example. article two has said in egypt since 1971 the sharia is the main source of legislation. it still says that now. but article 219 then defines the principles of the sharia in very
10:08am
specific terms of sunni jurisprudence. you've got to be an expert in islamic law if you want to have a prayer of discussing laws. there's lots of things like that. that's what's angering a lot of these liberals. >> steve, do you think the islamists will be able to push this through? >> egypt is a country of stunning ironies. they have pushed it through. the question is whether people will accept it. i think this was all kicked off by the fact that revolutionaries, supporters determined that they were not going to allow the muslim brotherhood to run the table unchallenged. it's unclear whether they will be able to overthrow morsi but they want to teach him a lesson by coming out into the streets and saying we will no longer be ruled by decree. you cannot take away the rights that we fought so hard for
10:09am
during those days of january and february of 2011. >> if you think of it, egypt is the great experiment. everybody now understands democracy is not just elections. it's liberal constitutionalism. it's these documents. it's civil society. egypt seems to be going in the direction of not liberal democracy but illiberal democracy. >> right. you're absolutely right that people who are worried about egypt right now absolutely see it going in this illiberal direction. the constitution guarantees some individual rights, has great language about individual rights, but it makes it all subject to the sharia or principles of the sharia. >> the state is given charge of public morality. a loose open ended term. >> absolutely. women's rights, for example which there's been a constitutional article that said the state will work to achieve
10:10am
equality between men and women. as long as it doesn't violate principles of the sharia. that was in the constitution. now it's gone. now there's a nondiscrimination clause, but it doesn't mention women as a protected class. it is a step backwards in terms of liberties. if you believe what we care about when we look at democracy, we don't just care about the voting, it is important, we care about freedom and liberty for people, you would have to think egypt is not going in the right direction. >> do you think the united states has a roll, steve? >> certainly it does. president obama came out during the egyptian up riding saying that it has to go. clearly the united states has put itself on the side of people that want to live in freedom and democracy. 'til now, the administration has been circumspect. i think it does deserve the white house making a strong
10:11am
statement about the importance of freedom, democracy, accountability, rule of law. certainly as mark said, the way the constitution is written morsi's decree suggests that egypt is going in the wrong direction. in the abstract, this kind of contested national dialogue over a constitution is a good thing. the problem is that no one, no one is moving towards compromise, they're moving towards confrontation. and what that means is that the brotherhood will seek to impose its will on the rest of the population, and as we've seen in the past two weeks, nobody is willing to put up with that. >> what does this say about morsi? he came across as this broker in the gaza negotiation. is he a dictator in sheep's clothing? >> when we were on your program over the summer and morsi wads elected president and we said he's a fighting personality. this is the way i think both of us expected him to behave. i don't think he wants to make himself president for life.
10:12am
this constitutional declaration he made that gives him these powers that by virtue is almost going to be null. it's going to be irrelevant soon. once the new constitution is passed. for morsi, he is a faithful, islamic idealogue. he wants to move them toward this direction he cares about. that's what this move is. remember, we have several steps down the line. morsi has to look at the constitution, he will send it back to the constituent assembly, perhaps with amendments to be made, perhaps not, then it goes to the egyptian people and the egyptian people have to vote on it. and that's the question now. what will the liberals do? will they boycott the referedum process or get out into the streets and compete with the muslim brotherhood on the merits of the case? >> the liberals didn't do much and they got wiped out. 77% of the people voted for that referendum that they opposed.
10:13am
we hope they would get out there and really mobilize against this. >> pleasure as always. up next, china. we know who the new leaders are but what are their policies? i have two very smart experts to explain. [ male announcer ] citi turns 200 this year. in that time there've been some good days. and some difficult ones. but, through it all, we've persevered, supporting some of the biggest ideas in modern history. so why should our anniversary matter to you? because for 200 years, we've been helping ideas move from ambition to achievement. and the next great idea could be yours. ♪
10:14am
bp has paid overthe people of bp twenty-threeitment to the gulf. billion dollars to help those affected and to cover cleanup costs. today, the beaches and gulf are open, and many areas are reporting their best tourism seasons in years. and bp's also committed to america. we support nearly 250,000 jobs and invest more here than anywhere else. we're working to fuel america for generations to come. our commitment has never been stronger. [ male announcer ] a european-inspired suspension, but it's not from germany. ♪ a powerful, fuel-efficient engine, but it's not from japan. ♪ it's a car like no other... from a place like nother. introducing the all-w 2013hevrolet malibu, our greatest malibu ever. ♪
10:15am
i heard you guys can ship ground for less than the ups store. that's right. i've learned the only way to get a holiday deal is to camp out. you know we've been open all night. is this a trick to get my spot? [ male announcer ] break from the holiday stress. save on ground shipping at fedex office. to come home for the holidays. that's double miles you can actually use... sadly, their brother's white christmas just got "blacked out." [ brother ] but it's the family party! really jingles your bells, doesn't it? my gift to you! the capital one venture card! for any flight, any time! that's double miles you can actually use! how illuminating. what's in your wallet? let me guess, am i on the naughty list again? ho ho ho! [ male announcer ] it's that time of year again. medicare open enrollment. time to compare plans and costs. you don't have to make changes. but it never hurts to see if you can find better coverage, save money, or both. and check out the preventive benefits you get
10:16am
after the health care law. ♪ open enrollment ends december 7th. so now's the time. visit medicare.gov or call 1-800-medicare. about a week after our election in america china announced a new set of leaders.
10:17am
seven men who will manage the running of the world's number two economy. we have paid too little attention to this changing of the guard. will they take on corruption? will they reform the economy. what will their foreign policy look like? i have to great guests to shed light on all of that. welcome. and the new yorker china correspondent. liz, you have a very tough blog posting on the excellent council on foreign relations website which you say china's 18th party congress was a heartbreaker. it was a triumph of the party's skrif -- conservative click. the candidate will the strongest credentials were left high and high. they took their place among the top seven. you see this as a real kind of reinstitution of a hard line conservative group. >> i do.
10:18am
i think this was a disappointing outcome from the 18th party congress. if you look at this leadership group they bring a wealth of experience to the table. collectively these seven men have governed roughly half the provinces. or large municipalities. a number of them do have experience at the national level with the economy or political arena but by in large they are distinguished by their lack of distinction. none of them have been associated with an innovative program or policy reform on the economic or political front. i think the fear in beijing is they are in for another five years of what they've had but perhaps with a slightly more confident leadership. >> one of the things i've heard from people in beijing mostly privately, publicly, guy like eric lee who is very pro-regime,
10:19am
they say this is mainly selected on the basis of seniority. these are the sceeniosenior-mow people. in order to make the kind of changes that liz would like to see you need people with credentials and seniority and that's what this tells us. no more, no less. do you buy that? >> i think the group they ended up with was a compromise group. this was not the boldest reformers. these were not the people who have demonstrated a capacity and interest in making changes. these are people who will satisfy the enormous range of factions and vested interests which are now vying for control. if this new president wanted to get any traction at all, one theory is they had to satisfy these many constituencies. the other members of the standing committee are going to change.
10:20am
that may be an opportunity for some of these younger more reform minded figures to come to the top. >> liz, explain to us how china runs today. as china has become more powerful, it seems like its central leaders have become less powerful. from mao to hu jintao. would it be fair to say this is more collective leadership that the president is not going to have carte blanche to do what he wants? >> one of the things said about current leadership is that shoe gin pinning is the first chinese leader not to have been touched by some revolutionary leader. so he's lost one pillar of legitimacy for the chinese leadership. a second pillar of legitimacy would be continued economic growth. a third would be nationalism.
10:21am
i think this is going be a collective leadership. he doesn't have any leadership credentials, it will be tough sledding, to move forward in political or economic reform requires this group of seven to come together, and frankly speaking, i don't see that happening very easily. >> evan, what is in china seen as the pressing problems that these guys have to do. we in the united states and the west we have our list and it the tends to be the western reform model is they need to shift from an export oriented economy to a consumption economy. they need to free up some sectors, stop subsidizing state owned banks and national champions, they need to do political reform. but what do they think they need to do? >> if you talk to people on the street in beijing these days where i love, what you hear from people over and over again is fundamentally the same thing. they want their expectations of
10:22am
this government to be fulfilled. they want to know fundamentally that this government has the best interest of the people at heart. over the last ten years what they've seen is their own income, family income, has not kept up with the enormous pace of the growth of the economy. they feel ultimately they're not winning out. what the government has to do is figure out a way to reassure people that they are in fact the number one priority. you've heard this over and over again in the first language from this new president. when he gave the first speech he put aside some of the old language about socialism and chinese characteristics and a harmonious society. it's not because he's abandoning those ideas. they're very much the core of the platform. what he said over and over was we're not complacent. we recognize we have to respond to the people's demands. i think that gives us an idea that he understands that fundamentally people are losing patience with the party. the party has to do things to help regular people on the street feel they are participating as much in china's
10:23am
boom as it looks like they are from the outside. >> liz, you said peaceful rise is passe. the idea the chinese are trying to present their rise as very peaceful within the international system is not something they're trying to do. there's a lot of people that felt the chinese did some saber rattling with japan and the philippines and southst asia, and that that back fired, and the chinese learned that, learned the lesson they shouldn't try to be provocative. but you're suggesting no, this is a new, more assertive china. >> my sense in the past few weeks is we're going to see this new leadership continue with this more assertive foreign policy. they've developed a new passport that shows china as possessing all of the south china sea and it's caused quite a ruckus.
10:24am
with vietnam, philippines, taiwan, even india is upset. han on island says their military, their police will be able to board any ships that come into territorial waters, they define as the south china see, so i don't see china right now learning a lesson and taking a step back. i see what they're trying to do is changing the facts on the ground and thinking this is a long term policy and they're going to win out in the end. >> fascinating. thank you so much. up next, what in the world. is europe getting a new independent country soon? i'll explain. tdd#: 1-800-345-2550 let's talk about your old 401(k). tdd#: 1-800-345-2550 you know, the one that's been lying around. tdd#: 1-800-345-2550
10:25am
tdd#: 1-800-345-2550 rollover your old 401(k) to a schwab ira, and we'll help you tdd#: 1-800-345-2550 find new ways to make your money work harder. tdd#: 1-800-345-2550 so if you're ready to teach your old 401(k) some new tricks... tdd#: 1-800-345-2550 tdd#: 1-800-345-2550 talk to chuck. tdd#: 1-800-345-2550 rollover your old 401(k) tdd#: 1-800-345-2550 to a schwab ira tdd#: 1-800-345-2550 and you can receive up to $600. tdd#: 1-800-345-2550 see schwab.com tdd#: 1-800-345-2550 for terms and conditions. tdd#: 1-800-345-2550 call, click or visit tdd#: 1-800-345-2550 to open an account today. good boy. i heard you guys can ship ground for less than the ups store. that's right. i've learned the only way to get a holiday deal is to camp out. you know we've been open all night. is this a trick to get my spot? [ male announcer ] break from the holiday stress. save on ground shipping at fedex office. make a wish! i wish we could lie here forever. i wish this test drive was over, so we could head back to the dealership. [ male announcer ] it's practically yours. test drive! but we still need your signature. volkswagen sign then drive is back. and it's never been easier to get a jetta. that's the power of german engineering.
10:26am
get $0 down, $0 due at signing, $0 deposit, and $0 first month's payment on any new volkswagen. visit vwdealer.com today. [ gordon ] for some this line is a convenience. how you doing today? i'm good thanks. how are you? i'm good. [ gordon ] but for others, it's all they can afford. every day nearly nine million older americans don't have enough to eat. anything else? no, not today. join me, aarp, and aarp foundation in the drive to end hunger by visiting drivetoendhunger.org. aids is not going to take my baby. ♪ aids will not take our future. ♪ our weapons are testing... education, care and support. ♪ and aids... ♪
10:27am
aids is going to lose. aids is going to lose. ♪
10:28am
10:29am
now for a what in the world segment. a curious thing happened in the days following barack obama's election. a group of texans filed a petition on a white house website. they wanted texas to secede from the not so united states of america. the movement spread further encompassing each of the 50 states in the union. it's a ridiculous exercise that will go nowhere. there are some real impulses across the atlantic. europe might soon have a new independent state. look at catalonia. a region in northeast spain that includes barcelona. last sunday, they held parliamentary elections. a majority of the winners campaigned on a platform of secession. the vote follows an unprecedented demonstration in
10:30am
september when about one million catalons marched the streets demanding statehood. to put it in perspective, the entire population is only about 7.5 million. the next step could be a public referendum on breaking away. consider scotland which has already reached that point. in october british prime minister david cameron agreed to a deal allowing scotts to vote in 2014 as to whether they want to secede. then there's the strange case of belgium. the people speech dutch in the northern region. in the southern region they speech french. the people elected a set of local leaders who want to break away from belgium. why are break away parties gaining so much momentum? it's the economy at heart. according to leading daily only 57% of national taxes paid by catalon is returned.
10:31am
the rest is filtered to spain's poorer regions. scots also have an eye on england, even though they're poorer than england. they believe breaking away now would rid them of london's austerity plans, plus they could drill for oil in the sea. they are careful to calculate the costs and benefits. last year scots were polled on how they view independence. if independence made them worse off the results flipped. 500 pounds the only about 800 u.s. dollars. if independence made them worse off by the same amount, results flipped, 66% against independence, 21% for it. remember, 500 pounds is only 800 u.s. dollars. adam smith, a scot, would be proud. europe's economic problems are straining ancient fault lines. northern italy recent having
10:32am
ineffective bailout of neighbors. there's an irony. if you apply that across the continent, the eurozone itself would fall apart, perhaps starting with the departure of germany. by the way, if we applied that logic in america, states like new york, california, connecticut could point out they in effect subsidize states like alabama, mississippi, montana, states ironically the most fervent advocates of state rights and small government. up next, we'll take you into the heart of darkness, one of africa's most troubled nations has taken a turn for the worse. back in a moment. who do you think i am, quicken loans? at quicken loans, we'll provide you with myql mobile. this amazingly useful app allows you to take pictures of your mortgage documents using an iphone or android smart phone... so you can easily send them to us. one more way quicken loans is engineered to amaze. ooh, la-la!
10:33am
one more way quicken loans is engineered to amaze. music is a universal language. but when i was in an accident... i was worried the health care system spoke a language all its own with unitedhealthcare, i got help that fit my life. information on my phone. connection to doctors who get where i'm from. and tools to estimate what my care may cost. so i never missed a beat. we're more than 78,000 people looking out for more than 70 million americans. that's health in numbers. unitedhealthcare.
10:34am
10:35am
10:36am
the democratic republic of congo is a nation the size of western europe. it may be in for violent regime change, rebels called m 23 have gained ground in recent weeks. congo was the setting for joseph conrad's "heart of darkness." that darkness hasn't lifted in 110 years since the story was published. in the last 14 years alone, 5.4 million died in congo as a result of conflict and humanitarian crisis.
10:37am
jeff, why is it that the crisis seems to be heating up? you point out that the congo that the government's army is losing battle after battle. being routed in battle after battle by the rebels. >> i think this is really an issue of state failure. i've been covering congo for six years and i've seen the country get weaker and weaker since i began. there was a big election in 2006 that created a lot of hope and enthusiasm that things were turning around. they haven't. since then, the government has become more authoritarian, more corrupt, more rebel groups. what we are seeing is a symptom and cause. it's a symptom of this weak state that can't control its own territory. watch the couple hundred rebels
10:38am
march into the big es city in the country and they didn't do much about it. that's also a cause. now that the rebels have taken goma, a lot of other opposition groups are starting to think wait, maybe now is the time to really take on the government, and people are smelling blood in the water, and that's the worry that these rebels in eastern congo do not have the capacity or the support to march all the way to kinshasa, that's clear. they may form an alliance or trigger events that will bring down the government. >> this can get very bloody. the government is beginning to rely on and move to the worst kind of militias. it's been the group that engaged in rape, murder, recruited child soldiers. this could get very ugly. >> that's a really good point. both sides have horrendous human rights records. the government is now teaming up
10:39am
with the group called the fdlr which is the remnants of the army that committed genocide in rwanda in 1994. these guys are blamed for sweeping into villages, raping hundreds of women, chopping apart children, massacre of people. that's who the government is teaming up with. the rebels are accused of pulling people from huts in the middle of the night, shooting them in the head, so congo is this really, it's like this caldron of abuse on a scale that's unlike just about anywhere else in the world. i cover a number of these conflicts in africa. i cover somalia, darfur. just about everywhere else things are changing or getting a bit better in some cases. congo has stayed the same for almost ten years and that same is very disturbing state of anarchy. >> ironically, congo has enormous national resources, is a beautiful, lush country,
10:40am
right? >> yeah, it's spectacular. it is really one of the most beautiful places i've been anywhere. just last week, there was a huge volcano with streams of smoke shooting out of it. it's very lush. it's very fertile. the lakes are beautiful. the environment is clean. it's blessed with mineral riches, gold, timber, copper. diamonds, just about everything. that's part of the reason why we're seeing this fight. the u.s. government has tried to get their hands around this by passing this resource conflict legislation that tries to get their arms around better regulating the minerals that come out of congo. that hasn't really worked. it's not purely a mineral issue. it's a lot of power and control and politics. that's why this is so
10:41am
complicated and keeps going on. >> jeff get he willman, thank you. up next, the author of the black swan. he joins me. he has a new book out. to help those affected and to cover cleanup costs. today, the beaches and gulf are open, and many areas are reporting their best tourism seasons in years. and bp's also committed to america. we support nearly 250,000 jobs and invest more here than anywhere else. we're working to fuel america for generations to come. our commitment has never been stronger. ♪ ♪ [ male announcer ] everyone deserves the gift of all day pain relief.
10:42am
this season, discover aleve. all day pain relief with just two pills. [ male announcer ] can a car be built around a state of mind? ♪ announcing the all-new 2013 malibu from chevrolet. ♪ with a remarkable new interior featuring the available chevrolet mylink infotainment system. this is where sophisticated styling begins. and where it ends? that's up to you. it's here -- the greatest malibu ever. ♪ well, having a ton of locations doesn't hurt. and a santa to boot! [ chuckles ] right, baby. oh, sir. that is a customer. oh...sorry about that. [ male announcer ] break from the holiday stress. fedex office.
10:43am
10:44am
10:45am
is there an up side to the euro crisis? has the road to the fiscal cliff been a good thing for america? our next guest says yes. he takes a counter intuitive approach to almost everything, and has been financially very successful as a result. his most famous book, "the black swan" was a "the new york times" best seller about events that are essentially outliers, black swans. some credit that book with redistricting the 2008 economic crisis. he has a new book out called "anti-fragile." let's start with a couple of examples so people understand what you mean.
10:46am
you're saying some systems, you apply this in an amazingly comprehensive way to all of life, but some political systems are fragile and some are anti-fragile. for example, you say switserland is anti-fragile. why? >> fragile is something that doesn't like disorder. doesn't like volatility, variability, if something happens, it breaks. probably very fragile place needless to say would be saudi arabia or before arab spring was egypt, same regime for 40 years. something robust doesn't break, doesn't care. something anti-fragile never wastes, has political volatility, never wastes an error. improves from error to error. >> that's important. there's fragile systems like saudi arabia, egypt before the
10:47am
crisis, then there's robust systems which are better than fragile but anti-fragile for you are those that actually view change and volatility as an opportunity. >> as fuel. it's sort of like hydra. one had to grow back. the last thing it needs for you to harm it. we have the three, you know, categories, and we know what fragilizes. top down, soviet style fragilizes. gets you closer to anti-fragile. >> switzerland is good because it's this commune base political system where there's a lot of experimentation? >> exactly. people don't make the same mistake all the time. when something works they all adopt it. if they're really certain and conservative about it. there's something quite central. a mouse is vastly more robust
10:48am
than an elephant. if an elephant breaks a leg quickly, a mouse, let's not experiment. you throw a mouse out a window, it won't die. a lot after small animals is vastly more robust than having large animals. uchl people don't understand that size is not a good thing. in political life. >> what about the united states? >> the origin of the united states is a bottom up system. the origin. unfortunately, the share of federal government has been growing. then we started having large corporations dominating the scene, and saw mutation.
10:49am
there are two sectors in the united states today that resemble the model, all right. >> the anti-fragile. >> the anti-fragile model. one is the restaurant business, the other is silicon valley. silicon valley thrives on disorder. they try, experiment, have a lot of failures, they use failure as fuel. same with the restaurant business. the united states is moving away from a good system, anti-fragile system. let me give example of what it is overall. the idea that the air transportation, every plane crash leads to an improvement in safety. so you know when there's a probability, whatever probability of a crash you have the next one will be lower. the banking system today in united states, if one crashes, you know the probability of the next crashing is higher. we're not living in a healthy system. >> let's take this idea to
10:50am
individuals. in an interesting part of the book you say individual careers can be fragile and anti-fragile. >> like someone asked me yesterday on tv is the fiscal cliff a good thing or not. i said any variability, short term variability in price i compare in my book the life of a cab driver in london. with that of his brother, a functionary, okay, he has a steady job, they're both the same age, in their 50s. the cab driver will never go fully unemployed because he can adapt, change his pattern. he can figure out what's happening. he seems to have a volatile income. the volatility of the income gives him information where to go, how to adjust, how to adapt. and, of course, you know, his brother very stable income. if he's laid off, he's gone.
10:51am
age 53 you're laid off in london, say good-bye. >> if you have a job in a big company the danger there is only the company internally knows why you're valuable. if you're a little entrepreneur you've been hustling around, you have different sources of information and skill. you've been adapting. >> greenspan wanted to eliminate boom and bust. so by eliminating economic fluctuation, you eliminate information. you have all these risks accumulating under the rug. then it blew us up when the thing happened. you want the risks to be visible. a good system is one in which the risks are visible. the risks in lebanon are visible. you know all the players. and they're not fighting because they see each other. when it's visible i'm nervous. when i take a pill, all right,
10:52am
that gives me small benefits with invisible risks, you know, i'm incurring, you know -- i'm making a huge mistake. >> i could talk to you for a lot longer. it's a pleasure to have you on. terrific book. we will be back. what is so special about this house? it may give us great insight into the world's most populous country. [ male announcer ] citi turns 200 this year. in that time there've been some good days. and some difficult ones.
10:53am
but, through it all, we've persevered, supporting some of the biggest ideas in modern history. so why should our anniversary matter to you? because for 200 years, we've been helping ideas move from ambition to achievement. and the next great idea could be yours. ♪ look this isn't my first christmas. these deals all seem great at the time... but later, not so much.
10:54am
this isn't that kind of deal. [ male announcer ] break from the holiday stress. save on ground shipping at fedex office. [ male announcer ] it's that time of year again. medicare open enrollment. time to compare plans and costs. you don't have to make changes. but it never hurts to see if you can find better coverage, save money, or both. and check out the preventive benefits you get after the health care law. ♪ open enrollment ends december 7th.
10:55am
so now's the time. visit medicare.gov or call 1-800-medicare.
10:56am
on thursday it at the united nations, the palestinian authority was granted nonmember observer status. and that brings me to my question of the week. what is the only other entity with nonmember observer state status at the u.n.?
10:57am
is it, 56, tthe vatican, switze, taiwan or bermuda? stay tuned and we'll tell you the correct answer. go do cnn.com/fareed. you can follow us on twitter and facebook. go to itunes.com/fareed for our podcast. you can get the awudio version for free or buy the video version. this bookweek's book of the wee an inverted system. he inverted the idea what would make a system or country or individual anti-fragile. if you go to our conversation in the last segment you can tell this is a fascinating book from a highly inventive mind. for the last look. a political science professor likes to point out that in democratic nations highways are
10:58am
full of twists and turns to accommodate property and people. in autocratic they are straight because leaders can bulldoze whatever is in the way to get to a straight line. take a look at this interesting twist on that rule. the builders of this highway in china built their road in a straight line but as you can see the road has a house right in the middle of it. the homeowner refused to budge so they built around him. remember in the run up to the beijing olympics, the authorities tore down houses with abandon. perhaps times are changing in china. on the other hand it could be a fluke. my only remaining question is where is the family's mailbox. the answer is a, the vatican has been a permanent observer state of the u.n. since 1964. the holy sea has full rights in the body, the representative can make speeches, take part in debates.
10:59am
he can do anything except vote. thanks to all of you for being part of my program. i'll see you next week. hello, everyone, i'm deborah feyerick with a check of our top stories. people are demonstrating outside the high court. the judges say they're suspending all sessions until they can work without, quote, psychological or physical pressures. this was postponed the court's ruling on the legitimacy of the body drawing up the new constitution. well, just days after winning a status upgrade at the united nations, palestinian authority president abbas called for national unity and an end to divisiveness among palestinians. the pastinian authority is considered a nonmember observer state at the united nations. 30 days to avoid the country falling off the fiscal cliff. everyone's taxes go up and automaticpending cuts take